4 Nifty Ways To Use Money As A Tool And Not A Goal

By | January 7, 2018

Money is not a goal. Money is a tool. Treat it like one and you’ll notice that you’ll have enough and then some. Here’s how you can use money as a tool.

4 Nifty Ways To Use Money As A Tool And Not A Goal

Money is a strange beast. It has a mind of its own and comes and goes at it pleases, much like the monsoons. However, how much or how little you have is just a reflection of your financial habits. Perhaps you don’t understand your own financial behaviour and hence fail to understand the nature of money.

Hate it or love it – you need money in your life. The trick is to use money as a tool. Treat it like one and you’ll notice that you have as much as you need.

Why do you think almost everyone is grappling with monetary problems? This is because they are always focusing on the money they don’t have and not on the money they have. Think about using money as a tool and you will be able to utilise it to earn more.

Implement this strategy and you’ll be financially wiser than the rest. Don’t let money run your life. Instead give money a ‘run for its money’.

We’ll tell you how using these 4 nifty tricks.

Additional Reading: 5 Tips To Break The Paycheque To Paycheque Cycle
  • Trick 1:

You won’t be in a better financial position by just thinking about money as a tool. A few days of treating it like one won’t help your case either. You first have to clear the residue that has piled up due to your poor financial habits.

Yeah, we are talking about debt that hangs above your head like the sword of Damocles. You might think that with your rent payment, grocery shopping and car EMIs there’s barely anything left to clear the debt as fast as you should.

This is because you are thinking of money as a problem and not a solution. Now think of money as a tool that you are going to use to break down that ugly, jagged hill of debt.

The moment you get your salary in hand, your priority should be debt payment. Now don’t just mindlessly start paying your debt. This won’t bring you any closer to a debt-free world. Get smart. There are some effective methods of repaying debt that are gentle on your pocket. They are the stack and the snowball methods of clearing debt. Learn them and implement them for a secure financial future.

How will thinking about money as a tool help? Thinking of money like a tool will alter your mindset for the better. Once you start repaying your debt, you’ll have to manage your expenses with what will be left. Instead of struggling to make ends meet, you’ll find ways to shop cheaper and make do with what you have.

You’ll perhaps manage to save as well, something you couldn’t do even when you were debt-free.  Money, even a little bit, can be used as a tool that will help you meet all your needs. But if you cry over the little that you have left you’ll get nowhere. Your situation will perhaps worsen. So, start looking at money as something that can help you eliminate all your problems—even if you don’t have much to begin with—and not as something that you don’t have enough of.

Additional Reading: How To Use Money To Make More Money
  • Trick 2:

Stop fearing money. It does not pose any danger. You, on the contrary, pose a bigger danger to your money. You have spent so much and are so fearful of what your account might look like that you don’t even open your bank statements.

This is not how you mend broken relationships. You and your money need to talk it out. Spend time with your bank statements and you’ll understand what went wrong. Of course, you can avoid the painful confrontation and carry on with your regular life, but you could regret your decision later.

Just like you sharpen tools, you need to sharpen the value of your money by keeping a budget. Your account looks drab and bony today because you didn’t keep a budget. Now, look at your account and break up your expenses under different categories.

See where you went wrong. Do you spend a lot on groceries, entertainment, shopping? What’s your weak area? Looking at your bank statements in the only way to identify it. Let’s say you spend a lot on entertainment. Curb it. Money is a tool, you can control it.

Don’t you want to be rich? Think of that and use some of your entertainment money to make savings and investments. Don’t think of it as something you are giving up. It is something you are putting aside for better purchasing power in the future.

Once you learn to get the most out of every penny, you’ll automatically be left with more money in your account. All this without having compromised on your needs. Perhaps, you’ll save and make so much from your investments that you’ll quit your job and retire early.

We know it’s not easy to think of money as a tool, but don’t give up. You’ll be able to find a better solution to your problems with this mindset.

Additional Reading: Invest Young, Retire Early
  • Trick 3:

You earn so you can spend, at least a part of it. Some of it goes towards investments and savings too. So don’t be guilty about spending money. In fact, spending more can make you rich. Research says that people from high-income households take advantage of sale time and buy things in bulk to get discounts.

On the other hand, small-income households buy in limited quantities and pay the no-discount price. In the long run, high-income families end up spending less than low-income families. So, if you are out shopping and see that buying items of daily use in bulk is getting you a discount then jump right ahead.

You might pay a little extra at the moment to get the discount, but when you look at your budget at the end of each year, you’d have spent lesser. Spending more to get more is one the best ways to use your money as a tool. Stop guilt-tripping and keep your eyes open for all sales and discounts.

Additional Reading: 4 Factors That Affect Your Household Income And Savings
  • Trick 4:

Save money, make money – all the same. When you consider building your wealth, you look at making money and saving money as two independent activities. Well, they are two edges of the same sword. Not that different. Savings is a way of earning too. The trick lies in striking a balance between the two activities. You earn and save so that you can achieve your goals. But too much of either or both can actually be counterproductive to your goals.

Let’s say you are laser-focused on saving. Then there comes a sale with killer discounts on household items and other things you really need. But then you let this opportunity pass because the love of savings has clouded your otherwise sensible mind. This is seriously detrimental to your goal of saving. In lieu of saving you have actually spent more.

Likewise, let’s say you have a hobby and you need money to fund it. Hence, you go crazy doing odd-even jobs just to make those extra bucks? But then you have no time left to practice your hobby. Counterproductive again. Time to change your mindset towards money. Money is a tool, use it to meet your goals. Don’t sacrifice your goals to make money.

Additional Reading: 7 Unconventional Ways To Make Money

Create a budget, set your priorities and take baby steps. You’ll get where you want. How about consolidating your debt with a Personal Loan, and then when you are in the clear you can get a Credit Card to match your spending pattern. Think of cashback and rewards.

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